Saudi Arabia ZATCA Phase 2: What Businesses Need to Know
Intro
Saudi Arabia has taken a major step towards digital transformation with the ZATCA e-invoicing mandate. As businesses enter Phase 2 of compliance, it’s crucial to understand what the new requirements mean, the deadlines, and how the right software solutions can help companies avoid penalties.
What is ZATCA E-Invoicing?
The Zakat, Tax and Customs Authority (ZATCA) introduced e-invoicing to modernize the country’s financial ecosystem. Instead of traditional paper invoices, businesses must now issue structured electronic invoices that are verified in real-time.
This ensures:
- Greater transparency
- Fraud prevention
- Efficient VAT tracking
- Integration with Saudi Arabia’s digital tax system
What’s New in ZATCA Phase 2?
Phase 1 (Fatoorah) began in December 2021, requiring businesses to issue electronic invoices.
Phase 2 (Integration Phase), rolling out in stages, introduces stricter requirements:
Real-Time Invoice Integration:
- All invoices must be generated in XML format and integrated with ZATCA’s systems in real-time.
Security & Encryption:
- Invoices must include UUID, cryptographic stamps, and QR codes for verification.
Larger Business Rollout:
- The mandate first applied to large taxpayers, but now medium and small businesses are also being phased in.
Deadline Schedule:
- ZATCA is announcing compliance deadlines in waves, depending on company size and industry.
Who Needs to Comply?
Any company in Saudi Arabia that issues VAT invoices, whether B2B, B2C, or B2G, must comply with the e-invoicing system. Non-compliance can lead to:
- Financial penalties
- Suspension of VAT registration
- Legal consequences
How JH Systems Helps with ZATCA Compliance
At JH Systems W.L.L., we provide ZATCA Phase 2–ready solutions that integrate seamlessly with your existing systems.
- ZATCA-Compliant Invoicing Software – Issue invoices in the correct XML format.
- ERP & Odoo Integration – Automate VAT, accounting, and invoicing.
- Secure Digital Signatures & QR Codes – Ensure every invoice is verifiable.
- Real-Time ZATCA Submission – No manual uploads, fully automated.
Our solutions are designed for businesses of all sizes, from SMEs to large enterprises in Saudi Arabia.
Benefits of Automating Your E-Invoicing
- Faster processing with no manual errors
- Guaranteed ZATCA compliance
- Lower operational costs
- Improved transparency and reporting
- Scalability as your business grows
Final Thoughts
The ZATCA e-invoicing mandate isn’t just about compliance—it’s part of Saudi Arabia’s push for Vision 2030 digital transformation. Businesses that adopt automated solutions now will be more efficient, future-ready, and competitive.